What Are the Advantages of Customer Satisfaction?

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  • Written By: M.J. Casey
  • Edited By: Daniel Lindley
  • Last Modified Date: 16 January 2020
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The advantages of customer satisfaction to a business are hard to overestimate. They may be grouped into four categories: customer retention, advertising savings, pricing buffers, and business intelligence. These benefits are available to managers who actively cultivate a positive customer experience.

A high degree of customer retention is usually a major goal of a company. To implement a customer-retention program takes company-wide participation. Many businesses spend a significant part of the marketing budget attempting to capitalize upon the advantages of customer satisfaction. Customer retention statistics may be difficult to obtain, and these studies may be misinterpreted.

Business experts often state that the costs to sell to an existing customer are less than those to acquire a new customer. Established customers are already aware of the business and do not need to change established buying habits. Customer service is a key cornerstone of the maturation of the new customer status to that of an established customer.


About 20% of annual growth may be attributed to the careful nurturing of existing customers. Explosive growth rates, in the range of 50% to 100% per year, require multiple advertising and promotional efforts geared at the new customer. The benefits of customer satisfaction surface to the top in these fast-growth companies. Social media marketing alone can make or break a new product as thousands of unknown people provide an endorsement or point out the deficiencies of the latest market entry. A high-approval rating from a well-connected user can send the provider’s stock soaring and the cash registers ringing.

Pricing sensitivity, as one of the often perceived advantages of customer satisfaction, may actually increase as levels of customer satisfaction rise, due to higher expectations from established, satisfied customers. A decrease in pricing sensitivity or an increased priced tolerance may come from noticeable changes in customer satisfaction levels. Customers who observe a company’s increased efforts to improve the customer experience are more likely to accept price increases.

Often, customers can offer a unique source of feedback to the business owner. If appropriate communications means exist, customers will feel free to make constructive criticism. Business intelligence could come from the comments or observations of customers.

Consumers are often the first to know of new competitors, new techniques, or new technologies that can threaten the core products and services of a company. Focus groups may reveal this underlying knowledge as well as polling, data mining, and other market research methods. Business owners can frequently acquire at least some of this information by communicating with their own customers. Complaints should always be resolved as quickly as possible to maintain the advantages of customer satisfaction.


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Post 2

@RoyalSpyder - I've had a similar experience, except it was the exact opposite. Back in 2003, I used to go to this pizza shop all the time. It was pretty good, and the price was decent. However, it shut down eventually because of the cheap quality and cost of the pizza. What was once firm and saucy became tasteless and flimsy. No one was willing to buy it, myself included. Their attempt to save money led to their own downfall.

Post 1

Regardless of the business you're owning, customer satisfaction is easily the most important factor. In relation to this, cost is even more important. No matter who you're serving, or what you own, in this day and age, money matters a lot. It's always a good idea to make sure the price of an item/event isn't too cheap. After all, as a business, your sole purpose is to make money, right?

However, it's also not a smart idea to have the price at such a high rate that it displeases the customers. For example, I've had a friend who owned a pizza shop a while back. Unfortunately, it shut down because the price of his pizza was too expensive. As good as it was, no one was willing to buy it.

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